WILSON AUDIO/ cost vs. value


wilson ad; absolute sound;issue 162. page 12.... dave wilson states in his ad that wilson loudspeakers have one of the [ lowest ] profit margins in the industry. My question is should wilson make public their profit margin percentage's to back up their claims or is this more hyperbole from a high-end audio manufacturer...
aolmrd1241

Showing 1 response by hikejohn

I find this discussion rather silly. If you don't like a speaker....don't buy it. As to Wilson's profit margin...most companies operate on a similar set of margins within a given industry....which will vary somewhat if the sell directly to the end user...or indirectly through dealers. Part of my experience comes from helping to manage a hifi speaker manufacture...there are certain relationships between the DIRECT cost of goods and the consumer LIST PRICE. Typically it ranges from 4 to 5 times the cost of parts and labor to put the finished speaker in the box. Consequently if a speaker LISTS for $10,000....parts and labor would thus be approximately $2,000....dealers typically purchase the product from 30% to 40% of the list price....and usually the dealer pays for the freight (not an inconsequential item for Wilson Dealers)...thus the Dealer would make $3,000 - $4,000 our of which he usually pays freigh. It costs the typically dealer about 20% of the selling price....$2,000 to pay his overhead and g&a...the sales person is likely to earn about $1,000 on the sale. This leaves about 40% of the LIST price...or in this example about $4,000 for the manufacturer to pay his overhead, g&a, research and development and marketing/sales promotion. This analysis change if you were dealing with extremely high volume sales....but I suspect this is close to the financial model for Wilson....and other quality loudspeaker manufacturers.
I spent a long time before I purchased Wilson speakers...I understand that they may not appeal to all parties...but they work for me and some percentage of the market. I WANT them to make enough money to stay in business...which they seem to be doing...which is important to someone who carefully selects a given product and wishes to keep for a long time.

just my thoughts